Central banks globally remain on a tightening path, with the RBA having hiked 25bp to 4.60% on 29 September — its highest cash rate since 2011 — while the Fed, ECB and BoJ are all either hiking or signalling further tightening in response to sticky, energy-driven inflation. The ongoing Middle East conflict, now past seven months, continues to keep Brent crude near or above $100/bbl, feeding directly into the inflation pulse that is forcing policymakers' hands. US 10-year Treasury yields hit a multi-decade high of 5.34% during the week before settling at 5.24%, and the French-German yield spread blew out to over 140bp — its widest since 2012 — underscoring that fiscal stress is compounding the rate shock. China's export controls on rare earths and dual-use items to Japan added a geopolitical overlay, while the VIX fell 6.59% to 15.31, suggesting markets ended the week with some composure despite the volatility.
For Asia-Pacific markets opening Monday, the dominant cross-asset read is cautiously constructive at the margin: Wall Street closed Friday with solid gains after the shockingly weak US payrolls print (+29k vs ~90k expected) pushed Fed hike odds for the late-October meeting down to approximately 23%, offering bonds and risk assets temporary relief. The AUD firmed 0.42% to 0.6958 on the softer USD, a mild positive for domestic sentiment, though elevated domestic rates — the RBA at 4.60% with the door open to more — continue to weigh on rate-sensitive sectors. China markets return from National Day holidays today, and with iron ore down 5.42% on Friday to $91.35/t, the mood for Australian miners will be tested early; meanwhile Japan's Nikkei faces pressure from both the prior session's 0.94% decline and ongoing JGB yield elevation, while Hong Kong's HKEX fell 2.60% on Friday, signalling lingering fragility in the region.